What is Days to Break-Even?
The Days to Break-Even (DBE) metric calculates the number of days it takes a business to recover its customer acquisition costs (CAC). This is done by dividing CAC by the average revenue per customer (ARPC) annually.The formula for DBE is CAC / (ARPC / 365). For instance, if a company's CAC is $1,000 and its ARPC is $100 per year, it would take the company 365 days or roughly one year to break even (1,000 / (100/365) = 365 days). DBE is a crucial metric for businesses as it helps evaluate their return on investment (ROI) for customer acquisition. A low DBE means the company is recovering costs quickly, while a high DBE implies a longer recovery time and the need for a review of customer acquisition strategies. It's crucial to compare DBE with industry standards or company benchmarks for an accurate evaluationю